Qantas Debt Cut to Junk by Moody’s Amid Virgin Competition

Qantas Airways Ltd., Australia’s largest carrier, had its debt rating cut to junk by Moody’s Investors Service after flagging a record first-half loss and 1,000 job cuts amid increased competition on domestic routes.

Competition from Virgin Australia Holdings Ltd. is causing a “sharp deterioration in the company’s core domestic business,” Moody’s Senior Vice President Ian Lewis wrote in a rating opinion today, lowering Qantas’s senior unsecured debt to Ba2 from Baa3. Standard & Poor’s cut the airline’s debt to non-investment grade last month.